For Fashion Brands, it is vital to optimize the flow of residual stocks. And to satisfy the customers on the numerous channels of distribution.
In France, the share of balances now reaches 40% of the turnover of the profession against less than 30% ten years ago. At that time, everyone was waiting for the sales. Some even took a day off to find the best deals.
But where did this frenzy of sales goes ? Has it been transferred to the web or just diluted throughout the year in the many promotions? Fashion logistics must be irreproachable.
The balances exist precisely to help the merchants to clean the stocks of unsold and not to generate turnover often little tide. In the clothing sector, the first week of sales is decisive. It allows to sell about 50% of the total volume on this event. After twelve days, this figure rises to 80%. In other words, it is inconceivable to miss the start and that a strategy is essential.
Unlike our European neighbors, the regulations are very strict in France. The sales period is six weeks twice a year. It is also allowed to sell at a loss only at that time. Since 2007, the intervention of floating balances has completely downplayed the importance of this event. To answer and preserve their margins, merchants have found many tips: restocking good products for sales, small discounts (-20%), private sales (not so private), PLV even misleading, sales disguised as seasonal courses, batch promotions … etc. Faced with a “super” promotion, the customer would be well advised to think about the value for money rather than the commercial message.
Since the early 2000s, the seasons have gradually slipped. Summer starts in June, winter in December, one month before sales in both cases. Take the example of this season summer 2016. The sun is waiting. Stocks are cumulative and will be sold between 30% and 70% to the delight of customers … But what a mess for traders! What will they sell after the sales when the good weather has arrived ?
Why not shift these balances at the end of the real season ?
Let’s take an example. Over the summer period, places of consumption are changing, e-commerce is slowing down. The holiday destination areas for the French but also the foreign tourists have a potential for stock flow was very important. Large international “Retailers” have it, understood when, on the Côte d’Azur, they were out of stock of swimsuits. The following year, after doubling the stock, they were able to double their sales with open stock.
What is the best steering solution for brands? When the season ends, it is about identifying bad products to sell and then pushing stock on the physical network to absorb the first waves of customers. It is important to maintain a stock e-commerce, logistics balances, sufficient in warehouse. This requires good sales forecasts by channel and by point of sale.
The best solution is to post high markdowns in the first week of sales. But also to keep restocking on a central stock, available for all sales channels. A very fast supplychain, logistics, will make it possible to control the flow on the most efficient channels / outlets. Note that the best sale will be the one that will be made on a website because it will be paid even before being prepared. The mechanized logistics sites respond very well to this need and the carriers offer express deliveries so that one can renew its stock in maximum 48h.
It is also possible to recover data from e-commerce sites, store traffic or even weather data. This allows the supplychain to prepare products or product families even before they are sold. The subject supplychain, logistics balance, has become strategically commercial and financially. Moreover, the function chairs the management committees of the distributors.
In fact, what Brand would not dream of lowering its costs, reducing inventories, attracting more customers and increasing sales?
Finally it’s pretty simple, everyone wants to put the right product in the right place, at the right time, at the right price and in the right quantities (Dr KEPPNER). Easy to say, but less easy to do …
By Bertrand Chabrier, Development Director of C-Log